Index

• 1991–1998 investing in bull markets, 25–40
• 1991–2002 solo trading, 25–56
• 1998–2002 global portfolio downswing, 40–56

• 2003–2014 investing as a team, 57–108
• 2004–2005 real estate boom, 68–74
• 2010–2012 European & Spanish crisis, 98–101
• 2013 decision to live in London, 101–103

•  
• absolute returns, 48–49, 52
• Acerinox, 12–14, 26–27, 33, 222
• active management, 173–175, 177–193, 195, 268–269
• active managers, 173, 184–190, 269
• activism, 35–36

• África Directo, 79

• Africa Support Fund, 78–82
• Agnelli family, 101, 234
• Ahold, 66, 72, 84–85, 104, 221
• aircraft accident, 74–75
• Alapis, 82, 98
• Albertos fraud case, 65
• albinism, 79, 80
• Alcocer, Alberto, 65
• Aldeasa, 48–49, 63
• alternative services to liquidity, 25
• American equities, 35, 37, 53–54
• America's Great Depression, 119
• appraisal summaries, 34–35
• AQR, 184
• Arce, Javier, 59–68
• Argentaria bank, 28, 39, 42
• Argentina, 145, 157–158
• artificial credit, 118
• Asch Lines, 253
• Asch, Solomon, 253–254
• Asia, 31, 37, 40–43, 48
• asset management, 220–221, 223, 268–269
• asset organisation, 220–221
• asset separations, 223
• Austrian Institute of Economic Research, 117

• The Austrian School, 113, 119
• The Austrian School of Economics, 111–136, 267
  • acquaintance, 50–51
  • historical overviews, 113–119
  • irrationality, 246
  • main tenets, 119–125
  • real-world applications, 126–136

• Austrian School for Investors, 111
• automobile manufacturers, 17–18

• ‘Average Johanns’ of the S&P, 199–200

• Azpilcueta, Martín de, 114

•  
• Báguena, Carmen Pérez, 76
• balance sheets, 196, 203, 219, 226, 230–231
• Banco Popular, 23
• Banco Santander, 16, 26–28, 31, 39, 58
• Banesto Bolsa, 58
• Bankia, 99
• banking sector
  • 1991–2002, 26–31, 38–42, 52, 54
  • 2003–2014, 62–64, 68–70, 78, 83–92, 98–99, 105–106
  • Buffet, 203
  • investments & savings, 144
• Bankinter, 26–28, 39, 99
• barriers to entry, 139, 210–214, 217, 229, 235, 259–260
• Barron's, 44, 191–193, 234, 238, 248
• Basf, 90
• basketball, 6–7
• BBVA bank, 28, 63
• bear markets, 28, 48, 60, 76, 82, 85, 103
• Being Mortal, 198
• Bel, 42–43
• Benjumea, José Ignacio, 11, 25
• Berkshire Hathaway, 180, 187–189, 201, 203, 206, 220
• Berkshire Performance vs. S&P, 500 187–189
• Berlin Wall, 4, 16, 29
• Bernad, Fernando, 76, 103
• Bestinfond, 25–28, 31, 33, 40, 45, 83
• Bestinver
  • Bestinver Bolsa, 45, 49
  • Bestinver Internacional, 40–43, 55–56, 71–74, 104–108
  • Bestinver Mixto, 45
  • Bestinver Renta, 25
  • early years, 10–23
  • employment history, 10–23, 25–56
  • going solo (1991–2002), 25–56
  • team investments (2003–2014), 57–108
• Betas, 164, 178–180, 203
• Big Mac index, 55
• biography, 3–108
• biotech companies, 63
• blackmail, 124–125
• BMW
  • direct investments, 217, 222, 241–244
  • going solo (1991–2002), 55
  • team investments (2003–2014), 73–74, 76, 94–95, 101
• Bogle, John, 176–177
• Böhm-Bawerk, Eugen von, 111, 115–116, 138, 246–247
• bonds
  • going solo (1991–2002), 40–43, 46
  • investments & savings, 145–149, 152–158, 163–164, 167
  • passive management, 177, 191–192
  • team investments (2003–2014), 81, 89
• book values, 38–39, 64, 179–189, 207, 242
• bottom-up stock selection, 236
• Brazil, 126
• bubbles, 46, 53, 59–69, 92, 124, 129–130, 269
• Buffett, Warren, 14–15, 18–19, 28
  • 1991–2002, 28, 37, 44–45
  • active management, 177, 180, 186
  • direct investments, 196–197, 200–209, 226
  • institutional imperative, 19, 62, 206
  • letter of thanks, 76
• bull markets
  • 1998 end of the cycle, 37–38
  • bubbles, 59–68
  • direct investments, 220
  • going solo (1991–2002), 25, 28–32, 37–38, 40
  • irrational investors, 257
  • team investments (2003–2014), 59–68, 74–76, 82
• Business Week, 6–7, 12
• buybacks/repurchases/reinvestments
  • direct investments, 203, 207, 215, 227, 233–234
  • fundamental index funds, 181–184
  • solo trading, 1991–2002 27, 31, 36–37, 44
  • team investments (2003–2014), 86–88
• buying first shares, employment history, 15–23

•  
• CAF, 30, 33, 48, 59, 63, 221
• Calle, Luis Saraiva de la, 114
• cancellations, 207, 227
• capital allocation, 227–228
• Capital Asset Pricing Model (CAPM), 164, 177–179
• CAPM see Capital Asset Pricing Model
• Caputto, María, 75
• carbon dioxide emissions, 255–256
• Carr, Nicholas, 263
• Case–Schiller index, 87
• cash flow
  • direct investments, 198–199, 209, 228–230, 241
  • fundamental index funds, 181–184
  • going solo (1991–2002), 39
  • investments/savings, 164–165
• central banks
  • currency manipulation, 129–130
  • economic cycles, 117
  • interest rates, 68, 129–130
  • investments/savings, 159
• CEPSA, 22, 49
• Cevasa, 17, 33, 49, 69, 85
• Chan, Mingkun, 76, 78
• China
  • BMW, 241
  • economic growth, 128–129
  • interest rates, 89
  • intervention problems, 126
  • team investments (2003–2014), 77–78, 89, 92, 102
• China Daily, 238
• Chvedine, Ivan, 76
• Ciba, 35, 86, 90–92, 97
• Cir/Cofide, 82, 98
• Citroën, 28, 35
• classifying companies, 20
• client letters, 45–46, 91–93
• climate change, 254–256
• coal, 134–135
• Cobas Asset Management, 103

• ‘cocktail party’ theory, 20–21, 32

• code of good governance, 2003–2014 64–65
• Cofide, 82
• Colomina, Javier, 40
• Commerzbank, 63–64, 105
• commodities
  • 1998–2002, 40–43
  • The Austrian School of Economics, 117, 132–135
  • currency linked, 133–136
  • investments & savings, 138–139, 143, 165, 168–169
  • passive investments, 192
  • team investments (2003–2014), 81, 86, 92
• Common Stocks and Uncommon Profits, 197
• Community Reinvestment Act (CRA), 88–89
• companies
  • Buffett's views, 200–209
  • classification, 20
  • donations, 78, 206
  • quality and price, 20, 54, 97–98, 197–200, 204–210, 217, 228–229, 252–253
  • to avoid, 224–227
  • track records, 271
• comparisons, Austrian School vs neoclassical tradition, 119–125
• competence problems, 258–259
  • competition
  • concept of, 120, 125–126
  • direct investments, 196–197, 202–206, 210–215
• competitive advantage
  • company quality, 54, 97
  • currency movements, 54
  • direct investments, 197, 204, 210–215, 225–227, 234
  • irrational investors, 261
  • maintaining, 127
  • real asset investments & savings, 139, 143–144
• Complutense University of Madrid, 5–7, 32
• conglomerates, direct investments, 220–221, 224
• Conservative Investors Sleep Well, 197
• copper prices, 151
• Corporación Mapfre, 48–49, 59, 63
• Corporate Express, 83
• corporate governance, 154, 204–206
• corporate social responsibility, 78–82
• Cortina, Alberto, 65
• cost aspects
  • asset management, 268
  • concept of, 121–128, 131–136
  • cost advantage, 211–212
  • direct investments, 198, 204, 211–214, 227, 230–232, 237
  • going solo (1991–2002), 46, 54–55
  • investments & savings, 139, 143, 150, 154, 163, 169
  • irrational investors, 247–249, 255, 260
  • passive management, 175–177, 184–186, 193
  • team investments (2003–2014), 67, 78, 82, 101
  • theoretical aspects, 114, 121–128, 131–136
• Covarrubias, Diego de, 114
• CRA see Community Reinvestment Act
• creating portfolios, employment history, 15–23
• Cuadrat, Xavier, 32
• cumulative flow, 174
• Cunningham, Lawrence A. 201
• currency
  • 1991–2002 fluctuations, 54–56
  • investments & savings, 138, 144–171
  • linked commodities, 133–136
  • manipulation & interest rates, 129–130
• currency depreciation
  • The Austrian School of Economics, 126, 133
  • direct investments, 230
  • going solo (1991–2002), 55
  • investments & savings, 146, 154–159, 162–164
  • team investments (2003–2014), 82
• cyclical companies
  • The Austrian School of Economics, 127, 135
  • competitive advantage, 127
  • direct investments, 208, 220, 222, 231, 234–235, 241–242
  • going solo (1991–2002), 17, 20
• cyclical stocks, 18

•  
• daily life of fund managers, 238–240
• Daimler, 241
• Dao of Capital, 111
• Dassault Aviation, 42–43, 105
• debt
  • 2003–2014, 60, 63, 77, 82, 89, 92–96
  • deflation, 132–133
  • direct investments, 197, 199–200, 203, 219, 222, 226, 230–232, 236, 244
  • free companies, 60, 63, 77, 82, 89, 92–96
  • investments & savings, 144–147, 155, 158–159, 164, 170
• deflation, 130–132, 135, 146, 236
• democracy, 31, 59, 87, 161
• deposit wars, 16
• depreciation see currency depreciation
• derivatives, 70, 81–82
• devaluations, 26, 30

• The Dhandoo Investor, 197–198

• differentiation, direct investments, 214
• direct investment in shares/stocks, 173, 190, 195–215, 217–244
• discount rate, 145, 163–166
• discounts
  • direct investments, 196, 207, 220–222, 224, 228–229, 241–242
  • team investments (2003–2014), 84–85
• disputes between shareholders, 36
• diversification, 11, 25, 34, 235–236, 241
• dividend yields, 13, 38–39, 52, 63, 180–184
• donations, 78, 206
• Dorsey, Pat, 210
• Dow Jones Indices, 37, 176, 185
• downswings, 1998–2002 global portfolios, 40–56
• Duckworth, Angela, 240

•  
• earnings
  • normalised earnings, 228–232
  • share price correlations, 20, 22–23, 228–232
• EBITDA estimates, 181–184
• economic cycles, 117, 119, 122, 129, 208, 222, 231, 234
• economic growth
  • China, 128–129
  • investments & savings, 147–150
  • theoretical aspects, 128–136
• economic theory, 50–51, 111–136

• The Economist, 55, 238

• education, 3–8
• Egypt, 158
• El Corte Inglés, 8–9
• Elecnor, 28, 33, 48–49, 59, 63, 221
• elections, 1996 37
• Electra de Viesgo, 26, 30, 32–33
• electricity stocks, 26–27, 30–35
• emotional instincts, 47, 90, 187, 247–249, 257, 260, 263–268
• empirical relationships, 116, 121, 146, 162, 164, 166, 179
• employment history, 8–56
• Endesa and it's subsidiaries, 32, 34–35, 44, 57, 85
• endowment effects, 259–261
• Enher, 27, 31–35
• enterprise values, 181–184
• Entrecanales family, 11, 25, 29, 53, 60, 65, 75, 238
• entrepreneurial profit, 120, 122–123, 125–128, 136, 162
• equilibrium, theoretical aspects, 126–127
• equities
  • 1998–2002 position, 40–49, 54–56
  • active management, 173–175, 177–193, 195, 268–269
  • The Austrian School of Economics, 130
  • direct investments, 173, 190, 229
  • going solo (1991–2002), 25–28, 33–34, 40–45, 48–49, 54–56
  • investments & savings, 146–172
  • irrational investors, 246, 248–251, 261
  • passive management, 173–177, 180–193, 195, 200, 268–269
  • semi-passives, 165, 175, 180–187, 191, 195, 200
  • team investments (2003–2014), 57, 60–63, 84, 92–94, 99, 108
• ERZ, 31–35
• ETF see exchange-traded funds
• European 2010–2012 crisis, 98–101
• European Central Bank, 68–69
• Ewing, Patrick, 6–7
• excessive growth focused companies, 224–225
• exchange-traded funds (ETF), 173, 175–176, 180, 186, 191–193
• Exor, 101, 220, 222, 224, 234
• Expansión, 238

•  
• factor investing, 180–184
• Fama, E. 179, 181, 184
• family companies
  • Agnelli family, 101, 234
  • direct investments, 218–224, 234, 241–244
  • Entrecanales family, 11, 25, 29, 53, 60, 65, 75, 238
  • March family, 15
  • Quandt family, 241–242
• Fannie Mae/Freddy Mac instruments, 87

• The Fatal Conceit, 50, 118

• Federal Reserve, 87–89
• Fernández, Pablo, 178, 185
• Ferrari, 224, 234
• Ferrovial, 94–95, 97
• Fiat, 126, 224, 234
• FIF see fundamental index funds
• financial crisis, 2008 86–93
• Financial Times (FT), 111, 133, 158, 185, 238, 255
• Fisher, Irving, 117
• Fisher, Philip, 196–200
• fixed costs, 212, 214
• fixed-income, 40–42, 49, 130, 144, 148–149, 155, 158–159, 164–167, 171, 246
• Fooled by Randomness, 254
• football, 155–157
• forecasts, 112, 123, 136, 150, 228
• formalism, 121
• France, 30, 114, 149, 185, 238
• Frank, Barney, 87–89
• fraud, 65, 82–83, 96
• Freddy Mac instruments, 87
• free lunches, 223–224
• French, K. 179, 181, 184
• Friedman, Milton, 78, 118, 122
• FT see Financial Times
• Fuchs Petrolub, 72, 74, 85, 212
• fundamental index funds (FIF), 173, 175, 180–184
• futures, 70, 81–82
• Futuro magazine, 59–68

•  
• Gabarda, Luis, 25
• GAL plot, 30
• Galton, Francis, 251
• Gawande, Atul, 198
• GDP growth, 125, 132, 148
• Germany, 41, 62–64, 100, 149, 154, 160–161, 241–242
• Gescartera case, 61, 67
• global cumulative flow, 174
• global passive funds, 174, 176, 192
• global portfolios
  • 1998–2002 downswings, 40–56
  • going solo (1991–2002), 26–27, 40–56
  • team investments (2003–2014), 58–59, 68–75, 82–86, 90–94, 97–101, 104–108
• global temperatures, 254–256
• gold
  • The Austrian School of Economics, 117, 133
  • investments & savings, 139, 143, 146–150, 159–165, 169, 171
  • use as currency, 117
• government bonds, 41, 43, 145, 148, 164
• Government-Sponsored Enterprise (GSE), 87–90
• Graham-and-Doddsville superinvestors, 186
• Graham, Benjamin, 195–196, 202
• Greece, 98–101
• Greenblatt, Joel, 98, 196–200, 209
• Greenspan, Alan, 28, 31, 129–130
• Greenwald, Bruce, 210, 213
• growth focused companies, 224–225
• GSE see Government-Sponsored Enterprise

•  
• Haberler, Gottfried von, 115

• ‘halo effect’, 214, 225, 253

• Hayek, Frederich A. 50, 113–115, 117–119, 122, 128, 130, 208
• hedge funds, 37, 83, 111, 179, 184

• ‘herd’ mentality, 253–255, 267, 269

• Hidrocantábrico, 22
• historical overviews
  • The Austrian School of Economics, 113–119
  • employment, 8–56
  • personal, 3–108
  • real & monetary asset comparisons, 146–151
• History of Economic Thought, 50, 119
• holding periods, 152–153, 155–157, 201
• Hong Kong, 62, 169
• Hoppe, Hans Herman, 161
• housing markets, 59–70, 74, 81–93, 98–101, 168
• Huerta de Soto, Jesús, 50, 113, 117, 119, 123–124
• Human Action, 50, 112, 115, 118
• human action/behaviour, 50, 112, 115–124, 129, 136
• human capital, 121–122

•  
• Iberdrola shareholders, 26–27, 64
• IBEX, 35 38, 51–52, 55, 59–60, 66, 176, 180
• IBEX P/E Ratio, 38, 51
• IESE see Instituto de Estudios Superiores de la Empresa
• IF see Index Funds
• IGBM (Madrid Stock Exchange General Index), 26–28, 30–31, 38, 52, 55–56
• illusion problems, 258–259
• IMF see International Monetary Fund
• income statements, 14, 229–230
• indebtedness see debt
• Index Funds (IF), 173, 175–176, 180–184, 191, 195
• industry maps, 213
• infant business problems, 225–226, 232
• Infinite Vision, 198
• inflation
  • (2003–2014), 60–63, 68–69, 77, 81, 86–87
  • Buffet, 208
  • investments & savings, 146–148, 152–160, 164
  • theoretical aspects, 132, 146–148, 152–160, 164, 203, 208, 231, 236
• information
  • concept of, 120, 122–124
  • overload, 262–264
• Information Technology tools, 75
• initial analysis and investments, employment history, 12–23
• initial portfolios, Bestinfond, 27–28
• initial public offerings (IPO), 202, 223–225
• institutional imperative, 19, 62, 206
• institutions, irrational investors, 261–262
• Instituto de Estudios Superiores de la Empresa (IESE), 9–11, 17, 77–78, 115
• insufficient demand, 114
• intangible assets, 212

• The Intelligent Investor, 196

• interest rates
  • 2003–2014, 59, 62, 68–69, 86–89
  • The Austrian School of Economics, 116, 118, 126, 129–130
  • Brazil, 126
  • currency manipulation, 129–130
  • European Central Bank, 68–69
  • going solo (1991–2002), 27–28, 30, 37–38, 52
  • investments & savings, 155, 163
  • team investments (2003–2014), 59, 62, 68–69, 86–89
• interest theory, 116, 246–247
• International Monetary Fund (IMF), 30, 132, 158, 261
• international portfolios
  • going solo (1991–2002), 26–27, 40–43, 48–49, 54–56
  • team investments (2003–2014), 58–59, 68–75, 82–86, 90–94, 97–101, 104–108
• Internet, 44, 60, 138, 212, 263
• intervention problems, 125–136
• intuition, problems with, 247–248
• investing directly in shares, 173, 190–191, 195–215, 217–244
• investing as a team (2003–2014), 57–108
• investments & savings, 137–173, 176, 187, 190–191, 207, 246–251, 267–273
• IPO see initial public offerings
• Iraq wars, 15, 87
• Ireland, 68, 99, 131, 149

• ‘irrational exuberance’ of stock markets, 31

• irrational investors, 245–265

•  
• Japan, 17–18, 42–43, 54, 62, 77, 81, 131, 149
• Jones, Bradley, 261

•  
• Kahneman, D. 247, 249–251, 257
• key employees, 226
• Keynes, 19, 114, 118–119, 121–122, 208
• Kilisun for people with albinism, 80
• Kirzner, Israel, 115, 122
• knowledge
  • direct investments, 217, 224, 241–242, 250–251
  • investments & savings, 171
  • risk, 19
  • theoretical aspects, 117, 120–123, 126–130, 136
• Korean companies, 76, 193, 222
• Kuwait, 15

•  
• labour theory of value, 114
• Lachmann, Ludwig, 115
• language learning, 5–6
• large cap price relationships, 26–31, 44, 55
• Lastra, Beltrán de la, 103
• Latin America, 35, 37, 192
• Lázaro, Álvaro Guzmán de, 57–59, 75–76, 93, 101–103
• learning languages, 5–6
• Lehman Brothers, 84, 86, 90, 209, 243
• Les Echos, 238
• letter to clients, 45–46, 91–93
• liabilities and assets, 163, 167, 230–232
• liberalisation, 11, 29–31
• lifetime investments & savings, 166–172
• Lingotes Especiales, 28, 33
• liquidity
  • 1995–1997 liberalisation, 30–31
  • 1998: end of the cycle, 37–38
  • alternative services, 25
  • direct investments, 196, 206–207, 219–222, 233, 242
  • going solo (1991–2002), 25–27, 30–32, 37–38, 44, 48
  • guiding principles, 272
  • investments & savings, 147, 162–163, 166, 170–171
  • team investments (2003–2014), 69, 74, 82–85, 90–92, 97
  • valuation errors, 84–85
• listed shares, 146, 167, 171, 218, 223, 267, 272

• The Little Book That Beats the Market, 98, 197–200, 209

• living standards, 273–274
• long-term direct investments, 195–200, 203–212, 215, 218–219, 222, 226, 229, 234–235, 240–244
• Loomis, Carol J. 201
• LTCM, 37
• Lugo, Juan de, 114
• Lynch, Peter, 12–15, 17–23, 168, 207

•  
• Madrid market, 30
• Madrid Stock Exchange General Index (IGBM), 26–28, 30–31, 38, 52, 55–56

• ‘magic formula’, 198–199

• management
  • active management, 173–175, 177–193, 195, 268–269
  • asset management, 220–221, 223, 268–269
  • The Austrian School of Economics, 118–119, 125–127, 136
  • direct investments, 195, 200–215, 217–244
  • early years, 11–17, 20
  • investments/savings, 138, 150, 162, 165–166, 169
  • passive management, 173–177, 180–193, 195, 200, 268–269
  • prize, 29
  • solo trading, 1991–2002 25, 29, 35–36, 40–42, 46–47, 51–56
  • team investments (2003–2014), 57–62, 65–68, 75–77, 83, 93–103
• Mapfre, 48–49, 59, 63
• March family, 15
• marginal costs, 135
• margin of safety, Graham, 196
• Mariana, Juan de, 114

• ‘market average’ returns, 53, 199, 228, 246

• market recognition, 233–234
• market recovery of, 2009 94–98
• market stagnation, 26, 131
• market valuations, 38–40, 52, 188–189, 191–193, 227
• Markowitz, Harry, 177
• Márquez, José María, 79
• Martínez-Conde, Santos, 14–15, 25
• Marx, 114, 116
• Master in Business Administration (MBA), 9–10, 14
• Mataix, Jorge, 25
• maturity, investments & savings, 170–171
• MBA see Master in Business Administration
• mean regression, 251
• mean reversion, 154, 180–181, 184, 251–252
• medium-sized global company investments, 31, 42, 44, 48
• Mehta, Pavithra K. 198
• Menger, Carl, 113, 115–116
• Mercedes, 241
• mergers and acquisitions, 205–206, 225
• Merval Index, 157–158
• Messi, Lionel, 155–157
• Metall Zug, 74
• metal prices, investments & savings, 151
• metals, 139, 151
  • see also gold
• Metrovacesa shareholders, 27, 64
• military service, 6
• mining companies, 133–136
• Mises, Ludwig von, 50, 112–113, 115–118, 122, 161, 246
• modern portfolio theory, 177
• Molina, Luis de, 114
• monetary asset choices, 138–172
• Money, Bank Credit and Economic Cycle, 117
• monitor sequencing, 250–251
• Montier, James, 253–254
• mortgages, 2003–2014 81, 86–89, 94
• Mr Market, 202, 243–244
• MSCI index, 48–49, 56, 176, 180, 191–193, 218
• multinational automobile manufacturers, 17–18
• Munger, Charlie, 197, 203
• Muñoz, Alfredo, 74–75
• mutual funds
  • 2003–2014, 60, 64, 75
  • active management, 173, 190
  • definitions, 173
  • investments & savings, 138, 165–167
  • passive management, 173, 176, 190

•  
• Nansa, 32–35
• Nasdaq, 46, 62, 81, 193
• Natraceútica, 63
• NAV, 2003–2014 83, 94, 97
• negative interest rates, 68–69
• negativity problems, 263–264
• neoclassical school, 7, 112, 118–123
• net wealth composition, Spain, 167

• ‘network effects’, 212

• newspapers, 61–62, 99, 111, 133, 158, 185, 238–239, 255
• Newton, Isaac, 124
• Nissan Motor Ibérica, 17–18
• non-payment problems, 145, 160
• normalised earnings, 228–232
• NPL ratio, 63

•  
• objective theory, 114, 116, 120–122, 124–125, 136
• oil prices, 41–43, 52, 86, 134–136, 150
• Olson, Marcus, 160
• One Up On Wall Street, 12–15, 17–23
• opaque accounting, 226
• opportunities, direct investments, 217–244
• options, 70, 81–82
• organisation of assets, 220–221
• origins, 3–5
• O'Shaughnessy, James P. 181–185, 251
• overpricing, 31, 42, 44, 53, 64
• ownership, real assets, 139

•  
• Pabrai, Mohnish, 197–198
• Parages, Beltrán, 75
• passive management, 75, 173–193, 195, 200, 268–269
• patents, 211–212
• patience, 32, 41, 66, 70, 92, 250
• patient capital, 79
• Paul, Ron, 89–90
• pay linked to company economic results, 53
• Pedrosa, Ignacio, 75
• P/E ratios
  • 1991–2002, 37–39, 48, 51–52
  • 2003–2014, 63, 93
  • active managers, 186
  • direct investments, 198, 210, 227
  • fundamental index funds, 180–183
  • investments & savings, 166
• percentage of countries in default, 160
• perfect stock, 234
• personal biography, 3–108
• personal investments, early years, 15–23
• Pescanova, 220, 230, 259–260
• peseta devaluation, 26, 30
• petrol prices, 150
• point of reference, 120, 257
• politics
  • 2003–2014, 69, 74, 79, 83, 87–89, 98–99
  • Africa Support Fund, 79
  • Buffet, 208–209
  • intervention problems, 125–136
  • investments & savings, 144–145, 148, 155, 158–164, 171
• pollution, 255–256
• Ponzi schemes, 2003–2014 61, 67
• Popular bank, 23, 27–28, 39, 42
• Porter, Michael, 210
  • portfolio creation
  • employment history, 15–23

• going solo (1991–2002), 25–56

• Portugal, 82, 98–99, 205, 225, 259
• Portugal Telecom, 205, 225, 259

• “Potential Entrants'”, 210

• Prado, Carlos, 11
• predictions, theoretical aspects, 121, 123, 126–128, 136, 162
• prices
  • company quality, 20, 54, 97–98, 197–200, 204–210, 217, 228–229, 252–253
  • fundamental index funds, 181–184
  • large cap relationships, 26–31, 44, 55
  • momentum, 184–185
  • theoretical aspects, 133–136
• principal–agent problems, 155
• Principles of Economics, 113, 116
• private unlisted companies, 12
• prizes, management prize, 29
• protagonists, 117, 120, 122–123, 263
• public debt, 144–147, 155, 158–159, 164, 170
• purchasing power, 139, 146–158, 165, 168, 171–172, 176, 191, 203, 245

•  
• quality of companies, 20, 54, 97–98, 197–200, 204–210, 217, 228–229, 252–253
• Quandt family, 241–242

•  
• randomness, 254–255
• rapid decision problems, 27, 257
• reading, passion for, 4–5
• real asset choices, 137–172, 267
• real-estate
  • investments & savings, 137–143, 150, 165–170
  • team investments (2003–2014), 59–70, 74, 81–84, 89–90, 98–101
• real-world applications, The Austrian School of Economics, 126–136
• reference points, 120, 257
• regression theorem, 117
• Reinhart, Carmen, 159–160
• Reisman, George, 115
• relative returns, 39, 45–49, 52, 54–55
• remote IT tools, 75
• remuneration decisions, 53, 154, 204, 219
• repo rates, 68

• ‘representativeness’ problem, 251–252

• Repsol, 31, 58–59, 61, 225
• repurchases/reinvestments
  • direct investments, 203, 207, 215, 227, 233–234
  • fundamental index funds, 181–184
  • solo trading, 1991–2002 27, 31, 36–37, 44
  • team investments (2003–2014), 86–88
• return on capital employed (ROCE), 198, 207, 209–211, 241
• returns
  • active management, 177–180
  • direct investments, 196, 198–207, 211, 215, 218–246
  • going solo (1991–2002), 25–26, 30–32, 37–40, 44–49, 52, 54–55
  • investments & savings, 137–139, 145–171
  • irrational investors, 246, 251–253
  • passive management, 173–174, 180–186, 189
  • standard deviation, 152–153, 178, 183
  • team investments (2003–2014), 60–64, 67–68, 74, 78–80, 82–87, 94
• Ridley, Matt, 263
• risk
  • 1998 problems, 37–40
  • definitions, 153–154, 203–204
  • direct investments, 202–204, 212–214, 217, 222–225, 236
  • irrational investors, 248–251, 257, 260–263
  • knowledge, 19
  • real vs monetary asset investments, 145–158, 161–165, 171
  • team investments (2003–2014), 62, 66, 70, 74, 82, 88–90, 97
• risk-free rates, 163–164

• ‘risk premiums’, 151–153, 163–164, 178

• Road to Serfdom, 50, 118
• ROCE see return on capital employed
• Rogers, Jim, 77
• Rogoff, Ken, 159–160
• Roman legal tradition, 113
• Ronaldo, Cristiano, 155–157
• Rosenzweig, Phil, 214, 253
• Rothbard, Murray N. 50, 112–115, 119, 122–125, 130, 133, 158–159
• Rover Group, 241
• Russia, 37, 125, 150

•  
• S&P see Standard & Poor
• sacrificing returns, 123, 129–130, 137, 151, 167
• St. Anthony Primary School, Kamwenge, Uganda, 80
• Salamanca School, 114
• Salas, Juan de, 114
• Saltos del Nansa, 32–35
• Santander shares, 16, 26–28, 31, 39, 58
• savings & investments, 137–173, 176, 187, 190–191, 207, 246–251, 267–273
• Say's Law, 114
• scepticism, 10, 254–256
• Scherman, Harry, 145
• Schumpeter, Joseph A. 115
• secondary stocks, 30–31, 38
• sectoral effect, 237–238
• Security Analysis, 196
• self-analyse ability, 19–20
• semi-passives, 165, 175, 180–187, 191, 195, 200
• Sennholz, Hans, 115
• Serna, Mario, 57
• SGS see, see also Société Générale de Surveillance
• shadow reports, 34–35

• The Shallows, 263

• shareholding structure, 218–224, 234, 241–244
• shares
  • The Austrian School of Economics, 129–132
  • direct investments, 173, 190, 195–215, 217–244
  • employment history/early years, 13–22
  • going solo (1991–2002), 26–41, 45, 53–56
  • investments & savings, 138–139, 143, 145–158, 162–164, 167–171
  • irrational investors, 248–250, 254, 260
  • passive management, 175–176, 180–184, 187–193
  • price–earnings correlations, 20, 22–23
  • team investments (2003–2014), 58–70, 74–79, 82–86, 90–94, 103–108
• Shefrin, Hersh, 252
• Shenoy, Suchira, 198
• Shiller, Robert, 168
• short positions, 2003–2014 69–70
• short-term currency movements, 54
• Siegel, Jeremy, 146–147, 152–153, 155–156, 165, 168
• Siegfrieds vs. ‘Average Johanns’ of the S&P, 199–200
• small-sized global company investments
  • direct investments, 221–222, 236
  • going solo (1991–2002), 31, 42, 44, 48, 54
• Smith, Adam, 114, 116
• social enterprises, 78–82
• Socialism, 118
• Société Générale de Surveillance (SGS), 42–43, 224, 234
• solo trading, 1991–2002 25–56
• Soto, Jesús Huerta de, 50, 113, 117, 119, 123–124
• Southeast Asia, 31, 37
• South Sea Company stock market bubble, 124
• Soviet Union, 37, 125, 150
• Spanish 2010–2012 crisis, 98–101
• Spanish elections, 1996 37
• Spanish market
  • economic growth theoretical aspects, 128–129
  • going solo (1991–2002), 25–56
  • team investments (2003–2014), 57–108
• Spanish net wealth composition, 167
• speculation, 10, 16, 20, 207, 267, 272
• spin-offs, 223
• Spitznagel, Mark, 111, 198–200
• sport, love of, 6–7
• stabilization, investments & savings, 169–170
• stagnant sector problems, 227
  • Standard & Poor (S&P) 500 index 1990, 15
  • active & passive management, 176, 180, 185, 187–189
  • direct investments, 199–201, 223
  • team investments (2003–2014), 63, 94
• standard deviation, 152–153, 178, 183
• standardising company models, 58–59
• standards of living, 273–274
• statement of income, 14, 229–230
• stocks
  • The Austrian School of Economics, 117, 124–125
  • direct investments, 173, 190, 195–215, 217–244
  • employment history/early years, 10–12, 15–20
  • going solo (1991–2002), 25–33, 38–56
  • investments & savings, 153, 158, 164–166, 170–171
  • irrational investors, 245, 250–254, 257–260
  • passive management, 173, 176, 178–187, 190–193
  • team investments (2003–2014), 58–75, 81, 84–86, 90–91, 96–101, 104–108
• structure, direct investments, 218–224, 234, 241–244
• subjectivist tradition, 113–116, 120–121, 123–124, 135–136
• subsidized housing, 88
• summary of appraisals, 34–35
• superaccounts, 16
• superinvestors, 186
• Surowiecki, James, 253, 262
• sustainability
  • direct investments, 197, 209–214, 217, 241
  • investments & savings, 139, 146, 151, 168
  • passive management, 176
  • team investments (2003–2014), 63, 76, 79, 92
• switching costs, 212
• switching funds, 64

•  
• Taghizadegan, R. 111, 117
• Taleb, Nassim Nicholas, 123, 226, 254
• Taoism, 113
• team investments (2003–2014), 57–108
• Telecommunications, Media, and Technology (TMT), 26–27, 40, 42, 44–45, 55
• Telefónica, 26–27, 40, 44–45, 55, 63, 74
• Terra shares, 60–61
• The Austrian School, 113, 119
• The Little Book That Beats the Market, 98, 197–200, 209
• theoretical aspects, 111–274
  • active management, 173–175, 177–193, 195, 268–269
  • The Austrian School of Economics, 111–136, 246, 267
  • currency-linked commodities, 133–136
  • economic growth, 128–136
  • investments
    • directly in shares, 173, 190, 195–215, 217–244
    • savings, 137–173, 176, 187, 190–191, 207, 246–251, 267–273
  • passive management, 173–177, 180–193, 195, 200, 268–269
  • semi-passives, 165, 175, 180–187, 191, 195, 200
• Thomistic traditions, 114
• Tibestfond, 25
• time preference problems, 111, 114–116, 127, 155, 160–161, 246
• TMT see Telecommunications, Media, and Technology
• track records, 271
• transparency, 16, 79, 91, 93, 212, 219
• Transparency Charter, 79
• Treasury bills, 27–28, 41, 60–63, 147–149, 152–156, 162–163
• Tuckett, D. 187, 261–262
• Tversky, A. 249

•  
• UK see United Kingdom
• uncertainty, 15, 29–30, 35, 91, 267
• Unipapel, 28, 33, 49, 225
• United Kingdom (UK), 29–31, 62, 173, 191
• United States (US)
  • see also Standard & Poor 500 index
  • 2008 financial crisis, 86–90
  • Congress, 87–89
  • direct investments, 223
  • house prices, 168
  • housing market, 86–93
  • intervention impacts, 130–131
  • liberalisation, 29–31
  • real vs monetary asset investments, 146–149, 152–153, 155–156, 165, 168
• university education, 5–10, 14
• US see United States

•  
• valuations
  • The Austrian School of Economics, 117, 136
  • banking sectors, 38–40
  • Buffett, 207–209
  • direct investments, 196, 207–209, 217, 224, 227–234, 237, 243–244
  • Endesa, 34–35, 57
  • errors, 84–85
  • investments & savings, 170
  • irrational investors, 247–248, 257, 261
  • market valuations, 38–40, 52, 188–189, 191–193, 227
  • passive management, 176–177
  • team investments (2003–2014), 57, 61–62, 84
• value, labour theory, 114
• Value Factor Three strategy, 181–184
• value investing, employment history, 12–15
• Value Investor Insight, 223, 238
• Vanguard, 175–176, 193
• Velázquez-Gaztelu, Antonio, 58
• Venezuela, 158
• Viesgo, 26–27, 30–35
• Viscofan, 63
• Vivo, 205
• volatility
  • 1998: end of the cycle, 37–40
  • 2000–2002, 51, 56
  • 2003–2014, 83–84, 94
  • active management, 177–178
  • direct investments, 203–204, 208, 226, 232, 243
  • employment history, 15
  • guiding principles, 272
  • investments & savings, 151–157, 163–171
  • irrational investors, 245, 248–251
  • passive management, 191–193
• Volcker, Paul, 26
• Volkswagen, 241
• von Böhm-Bawerk, Eugen, 111, 115–116, 138, 246–247
• von Haberler, Gottfried, 115
• von Mises, Ludwig, 50, 112–113, 115–118, 122, 161, 246

•  
• Wall Street Journal, 238
• Walsh, Jack, 201
• weight aspects
  • The Austrian School of Economics, 132
  • direct investments, 197, 199, 226–229, 233, 236–238, 242
  • investments & savings, 164
  • passive management, 176, 180
  • team investments (2003–2014), 74, 83

• The Wisdom of Crowds, 253, 262

• Wisdom Tree, 184